RE:RE:Just do a comparison with MEG Energyhttps://pipestonecorp.com/investors Read the August 2023 presentation. Strathcona produces 55,000 barrels of Lloydminster heavy oil which they are shipping to the Gulf Coast by rail so they can get a good price for it. They also produce 55,000 barrels of Cold Lake thermal oil which sells at a $10/barrel premium compared to the heavy oil that MEG sells. Thermal oil and oil sands oil are the same thing. Some oil sands oil comes from mining and some comes from SAGD.
Strathcona are very interested in the condensate that PIPE produces. A reliable source of condensate for their heavy oil operations is just what Strathcona needs.
The exchange ratio implies an initial market capitalization of approximately C$8.6 billion,
Based on the closing share price of Pipestone’s shares on the Toronto Stock Exchange on July 31, 2023 of $2.72.
The $8.6 billion dollar market cap number is a meaningless number. Both companies agreed on the exchange ratio. On July 31 PIPE closed at $2.72 so someone did some bar napkin math and came up with an $8.6 billion dollar number for the combined market cap. With Strathcona being a private company, it is impossible to say what its true market cap is.
The comparison to MEG shows that when this new company goes public and starts trading, it will likely have a market cap much greater than $8.6 billion. The timing with TMX opening up is perfect. The weak hands giving their PIPE shares away today for $2.40 will likely regret it.